UPDATE 1-Europe pushes ahead with stricter data privacy rules

BRUSSELS Oct 21 (Reuters) - The European Parliament voted
to strengthen Europe's data protection laws on Monday, including
plans to impose fines of up to 100 million euros on companies
such as Yahoo!, Facebook or Google if they break the rules.

The vote in parliament's civil liberties committee opens the
way for further negotiations with EU countries and the European
Commission on the plans, the first revision to Europe's data
laws since 1995.

In the nearly two decades since then, vast changes have
taken place in how data is generated, stored, shared and viewed,
leaving lawmakers determined to get ahead of the game and draft
rules that they say will better protect individuals.

"The European Parliament has just given its full backing to
a strong and uniform European data protection law that will cut
costs for business and strengthen the protection of our
citizens: one continent, one law," said EU Justice Commissioner
Viviane Reding.

In its legislative proposal unveiled in early 2012, the
Commission suggested sanctions of up to 2 percent of global
turnover on companies that violate the rules, and said consumers
should have the "right to be forgotten" - that they should be
able to remove their entire digital traces from the Internet.

The parliament's civil liberties committee has come up with
nearly 4,000 amendments to the original plan, including
increasing the fine to 5 percent of annual worldwide turnover or
100 million euros, whichever is greater.

The changes also mean the replacement of the "right to be
forgotten" with "the right of erasure", seen as a lesser
obligation.

Officials said the change in language was necessary as
consultations with technology companies had made clear that it
would impossible to entirely remove someone's traces from the
Internet. Individuals should not be promised something that
could not be achieved, the officials said.

The regulation on data in the 28 countries that make up the
European Union will establish, when finalised, a single,
pan-European law for data protection, replacing the current
inconsistent patchwork of national laws. Companies will deal
with one law, not 28.

"The benefits are estimated at 2.3 billion euros per year,"
the Commission said in a statement.

Parliament, in line with the Commission's proposals, also
wants to impose strict rules on how data is shared or
transferred to non-EU countries. For example, if the United
States wants access to information held by Google or Yahoo!
about a European citizen based in Europe, the firm would have to
seek authorisation from a European data authority first.

That would establish an extra, EU-controlled gateway that
might go some way to assuaging the profound concerns raised in
Europe about U.S. data spying activities revealed via the leaks
from former U.S. data analyst Edward Snowden.

Facebook, Yahoo!, Google and other Internet-based firms, the
vast majority of them American, have lobbied against the
Commission's proposal, concerned it will damage their business
model by imposing an extra, costly burden on how they handle
data, and limit their ability to target goods at consumers.

U.S. authorities are also worried that if Europe establishes
strict new data rules, countries in Latin America, the Middle
East, Africa and Asia will tend towards the European model,
setting a higher global data-protection threshold.

That would leave the United States either having to offer
the same protections or lobbying to get countries to adopt its
less rigid code of protection, creating an uneven playing field
that could dent the competitiveness of U.S. firms.

"Tonight's vote also sends a clear signal: as of today, data
protection is made in Europe," Reding said in a statement.

Negotiations with EU member states and the European
Commission on the law are to start later this year or early in
2014. EU leaders will discuss the issue at a summit in Brussels
on Oct. 24-25 and could give some indication then of how quickly
they want to proceed.

The aim is to have the legislation agreed before May, when
the assembly breaks up and new European Parliament elections are
held. However, EU officials are not convinced this is feasible.